UBS has lifted its price target on St James’s Place PLC (LSE:STJ), the FTSE 100 wealth manager, moving the figure to 1,530p from 1,520p.
The revised target implies around 20% upside from the stock’s current level of 1,277p, giving investors a clear signal of where UBS sees the shares heading.
The bank maintained its buy rating, arguing that strong equity market gains during the second quarter should more than offset a softer outlook for new client money.
Analyst Nasib Ahmed said market returns of around 10% over the period would lift funds under management to an estimated £241.5 billion, some 9% ahead of consensus.
That higher forecast drives positive earnings revisions, with UBS raising its per-share earnings estimates by 11% in the near term.
The upgrade comes despite a notably more cautious stance on fund flows, reflecting growing concern about the threat posed by artificial intelligence to traditional wealth advice models.
UBS now builds a harsher AI disruption scenario into its base case, assuming gross inflows stop growing from 2027, rather than 2030 as it previously modelled.
The concern is that AI-driven advice tools could compete directly with the face-to-face model that sits at the heart of the St James’s Place business proposition.
The bank expects gross inflows of £5.45 billion and net inflows of £1.45 billion for the quarter, running 7% and 17% below consensus respectively.
Net flows are forecast to keep shrinking and are expected to turn negative by 2030, presenting a longer-term structural challenge for the group.
Even so, market performance of around 5% per year is expected to remain the main engine of asset growth over the medium term, providing some cushion against flow weakness.
St James’s Place currently trades on about 11 times UBS forecast 2027 cash earnings, a clear discount to rivals Quilter and AJ Bell, which sit in a range of 14 to 18 times.
Ahmed flagged several debates likely to surface when the company reports its half-year results on 29 July, drawing investor attention to a number of pressure points.
These include slower fund flow growth, a shift towards lower-margin products such as unit trusts and ISAs, and regulatory pressure from proposals for lighter-touch targeted support.
The bank does not expect a further provision release at the half-year stage, and has pencilled in a share buyback of £45 million for the period.